LexORGANON (INDIA) LTD. (NOW KNOWN AS INFER (INDIA) LTD.) AND ANR. versus THE COLLECTOR OF EXCISE AND OTHERS
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A
ORGANON (INDIA) LTD. (NOW KNOWN AS INFER
(INDIA) LTD.) AND ANR.
v.
THE COLLECTOR OF EXCISE AND OTHERS
B
JULY 22, 1994
(M.M. PUNCHH!, S.C. AGRAWAL AND B.P. JEEVAN REDDY, H.]
Excise Law-Opium Act 1878-Section !r-Va/idity of-{lpheld.
C
Movement of Opium-From one State to another in the course of
export across the frontier of India-Held, is an export within the meaning of
the Opium Act and not under the Dangerous Drngs Act 193()-ffence, levy of
excise duty by State valid.
M.P. Poppy Husks Rules, 195'>-Rules 3A, 5, 6 & 8 provisions imposing
D duty on opiunt-Held, primary pwpose regulatory and not collection of
revenue hence peifectly valid.
Constitution of Indi"a, Article 372-Schedule VII-Entry 24 of List-II
Entry 19 of List-Ill-Opium Act, 1878 M.P. Poppy Husks Rules, 195f)-/feld,
E preconstitutional Aci-Saved by the Constitution-Hence, rnles made there-
under valid.
Administrative Law-Opium Act, 1878-Sections 4, 5-Delegation of
powers-Essential functions-Provision not to be faulted as conferring Rule
making power without layfr1g down any policy-Held, scheme of the Act
F furnishes adequate guidance to the State.
The appellant obtained a wholesale licence under Rules S and 6 or
the M.P. Poppy Husks Rules, 1959 in the year 1974. In pursuance of a
'certificate of official approval of import' granted by Dutch authorities,
. the appellant entered into a contract for sale of Poppy Husks to a Dutch
G buyer. The appellant obtained the 'official authorisation or export' from
the office or the Narcotics Commissioner, with reference to the Import
Certificate granted by Dutch authorities. The export authorisation
specified that the said goods shall be exported through the Customs
House, Bombay, by sea, to Holland within three months from the date or
H issue or the said authorisation.
50
INFER (I) LTD. v. COLLECTOR OF EXCISE
51
The appellant then applied to the Collector of Excise, Mandsaur, A
Madhya Pradesh for grant of permission to transport the said goods from
Madhya Pradesh to Bombay for the purpose of exporting it to Holland.
The appellant claimed that no excise duty is Ieviable or payable under the
Rules of 1959 inasmuch as the Poppy Husks will be despatched from
Madhya Pradesh for export across customs frontier of India. The Collec-
tor of Excise declined to grant any permit without payment of duty under
the Rules of 1959.
B
The appellant filed writ petitions in the High Court for directing the
Collector of Excise to grant permit without payment of duty. In one of the
petitions the High Court granted interim relief subject to the condition of C
the appellant furnishing a bank guarantee in favour of the Registrar of the
High Court. Finally, the writ petitions were dismissed by a Division Bench.
On appeal before this Court, it was contended (1) that inasmuch as
the movement of poppy husks from Mandsaur district in Madhya Pradesh
to Bombay port for export to Holland is part of one single integrated D
transaction it is a case of nexport from India" within the punriew of
Dangerous Drugs Act, 1930 and therefore outside the purview of Opium
Act (2) that the levy of export duty by the Collector of Excise is incom-
petent; (3) that Section 5 of the Opium Act is in effect ataxiug provision
and relying on the principles in Sundera Ramiers, [1958] SCR 1422 case the E
parliament is not competent to levy duty on opium; ( 4) that it cannot be
said that the duty of excise is levied by the State in this case in as much
as the said Rules are made by the State as a delegate of the parliament;
(5) that the levy cauuot be justified even on the ground of being a "price
for parting with the privilege" and in any event the theory has been
negatived in Synthetics and Chemicals [1990] 1 SCC 109 case; (6) that the
duty cannot be justified as a regulatory fees (7) that the duty is excessive
F
(8) and that Section 5 is void on the ground of excessive delegation of
legislative power, (9) Since no guidance is provided by the Act and it was
open to the State Govt. to prescribe such rate of duty as it thinks ap-
propriate as has been held in M/s Rameshwar Prasad Krishan Gopal's, G
(1973) Tax Law Reporter 2503 : 73 All L.J. 739 case by the Allahabad High
Court.
Dismissing the appeals, the court
HELD : 1. The movement of Poppy Husks from Mandsaur district in H
52
SUPREME COURT REPORTS [1994] SUPP. 2 S.C.R.
A Madhya Pradesh to the Bombay port in Maharashtra Is an export within
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